Tackling Unemployment: The Legislative Dynamics of the Employment Act of 1946

Tackling Unemployment: The Legislative Dynamics of the Employment Act of 1946

Tackling Unemployment: The Legislative Dynamics of the Employment Act of 1946

Tackling Unemployment: The Legislative Dynamics of the Employment Act of 1946

Synopsis

Wasem examines the impacts and implications of the Employment Act of 1946 and discusses how provisions of the Act might be useful for today's policymakers.

Excerpt

As the United States approached the middle of the twentieth century, it was undergoing a considerable change in its conception of the role of government and of the government’s responsibility for maintaining the economic well-being of its people. The Great Depression had shaken the country’s economic foundation and posed a threat to the social stability of the United States. The activist programs of the New Deal intervened and, many say, prevented a complete national collapse. What the New Deal did not do, ramping up for the nation’s entrance into the Second World War did: end the economic depression. Direct federal spending for World War II, which stimulated wartime production, lifted America out of the Great Depression.

At the leadership level, many concluded that the wartime spending had validated the theories of John Maynard (Lord) Keynes, a British economist who advocated, among other things, deficit spending during economic downturns and depressions. Some policymakers further argued that it would be reckless if the government did not establish Keynesian economics as formal policy. There were quite a few leaders, however, who thought the New Deal had gone too far and who certainly opposed any effort to further strengthen the federal role in the economy.

Though the American public knew little of Keynes and his theories on compensatory spending, they did know that they wanted no more depressions. Many people, idle during the 1930s and working overtime during the war, were realizing that they were part of a national economic system and thus were vulnerable to its fluctuations. Moreover, the socioeconomic composition of the population was undergoing change, and the fact of social and economic interdependence was now obvious. The result was a redefinition of the role of government and government responsibility.

The push to enact full employment legislation was a pivotal step in this process. An examination of the debate on full employment policy offers an opportunity to identify the forces in this contest, to see how . . .

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